After an impressive run of form which saw Ghana’s real estate sector grow 19.9% in 2019, 12.5% in 2020 and 11.9% in 2021, the industry suffered a setback with a 7.1% decline in 2022. The reasons for the negative growth are not hard to decipher. Last year saw a cost of living crisis that is best evidenced by over 50% inflation as well as a sharp depreciation of the Ghana cedi against the currencies of major trading partners. Not only were people having to readjust their budgets as they faced higher food, transportation and utility costs, but property and land priced in US dollars seemed even more unattainable as the exchange rate worsened.

The slowdown was not only a matter of domestic conditions though. Hikes in interest rates in the USA, the UK and the Eurozone in response to higher inflation resulted in consumers facing higher borrowing costs. As Ghana’s real estate market, especially at the high end, sees a lot of diaspora investment, the higher interest rates took a toll on demand from abroad. Higher interest rates also discouraged investments in frontier markets like Ghana in favour of the safety of US treasuries and bonds.

The first quarter 2023 GDP figures however show a slight recovery for the sector as real estate grew 0.9% compared to the last quarter of 2022, and 7.6% when compared to the same period last year. It is far too early to say that the industry is rising from its slump, but thanks to the Domestic Debt Exchange Programme (DDEP), many investors are seeking to increase their real estate allocation as they believe it’s now a better store of value than government securities.

The increasing interest in real estate as an investment vehicle from CediTalk.com readers led me to partake in a real estate webinar organized by Investment Friends, a personal finance initiative started by Mimi Anane-Appiah and Seyram Ofori-Atta. The best part of the webinar was that it was capped by a physical tour of some of the fastest growing developments in the East of Accra. And I could not wait to share some of the prices with you.

East Legon Hills

The first destination was East Legon Hills, one of the most sought after destinations in the capital for new home owners. According to our guide, land here sells for about US$50,000 for a half-plot of 70×50 metres. Having just completed and published a survey which shows that 52% of Ghanaians have less than GH¢10,000 ($870) in savings, the huge disparity between land prices in this area and the financial strength of the ordinary Ghanaian could not have been clearer in my mind.

But it wasn’t land that our guide had for sale here – it was a block of 3-bedroom apartments selling for US$200,000 each or a rent of $1,500 per month. These prices made me realize that East Legon Hills was not truly an upcoming community, but rather a fully matured real estate market whose exclusivity is not too far from the East Legon from which it draws its name.

Amrahia

Amrahia is another new community with much more affordable real estate offers than East Legon Hills. Using the route from Adenta, you go through Frafraha and Ashiyie before you get to Amrahia. Our guide did not have apartments here, but she had land for sale ranging from GH¢200,000-GH¢220,000 per plot of 70×100 metres.

For starters, the cedi quotes were a welcome change. Secondly, the reason for the difference in prices were clear, as Amrahia is yet to see the number of estate developments that East Legon Hills has witnessed. Still, GH¢200,000 is objectively a lot of money. But it is not out of the reach of higher middle-income households which are looking for land through loans or pension savings.

Amanfrom

From observation, Amanfrom seems to have a higher level of real estate development than Amrahia (if I’m mistaken, kindly let me know in the comments). The prices are very similar though. Our tour guide had land for sale in a gated community from GH¢200,000-GH¢220,000 per plot.

It is not too far from Adenta or Frafraha, two established residential and commercial hubs. I think living here and working in central Accra should be a manageable commute. But then again, I’m more than open to helpful comments that would educate me and my readers.

Oyarifa/Ayi Mensah

The final destination of the tour is the place I am most familiar with. If you are coming from the Eastern Region to the Greater Accra Region using the Aburi road (N4), then Ayi Mensah is the community you enter right after you descend from Peduase. Keep going down that road and you will enter Oyarifa on your way towards Pantang and Adenta. Land in Oyarifa and Ayi Mensah is prized for reasons including the N4 highway which runs from the Tetteh Quarshie interchange all the way to Koforidua. This allows people who live close to the main road in Oyarifa and Ayi Mensah to be able to commute to central Accra with commute times not too disimilar from people living in Adenta. Another reason why this area is prized is because of its proximity to Aburi, the dream place to own a home for many people.

As you get closer to the Aburi toll booth though, note that the land here has quite a noticeable slope as you are approaching the Akuapem highlands. The greenery and the high elevation combines for a lovely view and relaxing weather but as more and more people have built in the location, the vegetation has significantly reduced. Our guide had land selling from GH¢200,000 per plot here.

Insights

1. We need to share. By far the biggest insight gained from this tour was the need to relinquish the old Ghanaian dream of living on large estates. Greater Accra accounts for only 1.4% of Ghana’s land mass yet it holds over 5 million of the 30 million population. High demand for land has pushed people further and further away from the centre of the city and into the outskirts of the region itself. Seeing three-bedroom houses and apartments built on a quarter plot of land convinced me that sharing was a much more realistic option to buying land than trying to own a whole plot or two. GH¢200,000 is a lot of money for one household. Divide that plot into two and it appears much more realistic.
2. More than just the cost of land. If you think paying GH¢200,000 is all you need to buy land then you are mistaken. After land acquisition, it may cost you up to GH¢10,000 to transfer land ownership to your name. And that is if the person you are buying it from has proper title to the land. If you are going to handle the whole registration process then it could set you back much more than that. Be sure to seek legal advice before you decide on a purchase.
3. Necessary for your portfolio. The reason why I decided to attend the webinar was because I feel like real estate is going to become a much bigger asset class in the portfolios of both individual and institutional investors in response to the DDEP, high inflation and the depreciation of the Ghana cedi. As someone who has been writing about the domestic investment environment for over a decade, it is time I educated myself about the industry and shared helpful insights to CediTalk.com readers.

I am looking forward to future webinars on real estate so that I can share with readers. In the meantime, you can send me an e-mail (jerome@ceditalk.com) if you are interested in any of these properties so that I connect you with people who can help you. Keep reading, and I promise to bring you more posts on real estate in Ghana.